How to Sell on Amazon UAE
Amazon is an internationally recognized company that provides its users with a host of products and services on its website. Moreover, Amazon also provides a platform to individuals who wish to sell their products. The Middle East is a region that has seen exponential growth in the interest and use of online services. Amazon recognized this as a lucrative opportunity and acquired souq.com, entering the Middle Eastern market as amazon.ae.
The UAE in particular has been quite receptive to the online market boom, with over $10 billion in online sales revenue in 2018. The high sales can be attributed to the average spending budget of online shoppers as well as a lack of apprehension towards the online mode of purchasing items. Over 63% of UAE’s internet users engage in online purchases. Moreover, the pandemic has further increased online sales. Such a lucrative market is hard to come by, which is why many are setting up online stores on sites like Amazon. In this article, we explore how you can set up your own online store and sell your products on Amazon successfully.
Things to consider before selling on Amazon
Before you start selling on Amazon you need to set up your amazon seller account. The registration process to set up your Amazon seller account is simple; all you really need to do is enter your business’s details and select a seller plan. There are two types of seller plans, which are as follows:
a. Individual Plan: This is for those who do not require additional selling tools or other add-on programs.
b. Professional Plan: This is for those who plan to sell in large quantities and require the selling tools Amazon has in order to conduct business.
One of the benefits of the Professional Plan is that you do not have to pay anything upfront to avail this service. Once you make a sale through the program, a small percentage will go to paying the Professional Plan. This pay-as-you-go program eases financial burden on the entrepreneur due to its conditional-installment based payment system.
You need to fulfil the following requirements to complete your registration:
- Trade License (for businesses) if you are the owner and a Power of Attorney only if you are a legal representative “or an account manager”.
- For Individuals: a recent bank account statement (less than 3 months old), credit card statement, or utility bill.
- National ID.
- A bank account for the proceeds of your sales.
- Business email address or Amazon customer account.
- Phone number.
Before you dive into the world of online selling, it’s important for you to select a line of business you can engage in that is profitable in the online space. Some of the top categories of products users purchase include the following:
a. Apparel and textiles
b. Handmade products
Moreover, the UAE’s shopping preferences also indicate overwhelming favour towards cash on delivery, with nearly half of all purchases being paid through this mode of payment. Enabling this mode of payment can help your business see a significant boost in sales.
Is Amazon the right platform for your business?
With the above benefits in mind, selling on Amazon seems to be a warranted tool for success. But is Amazon really the right choice for every business?
To know the answer, you need to closely examine some factors. Your products need to meet certain criteria to be eligible for selling on Amazon. there is a list of restricted items that cannot be sold on Amazon or require certain permissions, and other products can only be shipped locally. On the other hand, some products need to be customized to meet the different preferences of customers. While this feature is provided by Amazon for some products, some listings don’t enjoy this benefit. Lastly, if your product is large, fragile, or has a short shelf-life these conditions pose certain challenges in terms of storing and shipping. Another factor to consider is the high rate of competitiveness on the platform. If your product doesn’t have the advantage to make it stand out from the crowd of similar products, you may face some issues to secure a front place for your product. However, Amazon provides some smart marketing solutions to give your products a more recognizable voice.
Benefits of selling on Amazon UAE
The benefits of selling on Amazon UAE are numerous. As one of the world’s leading global retailers, the site boasts unrivalled traffic. And while competition is increasing on Amazon, demand for online shopping is rocketing. In fact, around 65% of UAE residents cite Amazon as their preferred retail outlet. Other benefits and advantages include:
Easy entry and low upfront investment
Amazon offers an easy access point for aspiring entrepreneurs who don’t have much capital from the outset. Listing fees are comparatively low and you won’t need to start paying until something sells. Plus, Amazon also has an active market for second-hand and refurbished items.
Immediate access to millions of customers
When it comes to online shopping, Amazon is most people’s first port of call. That means millions of potential customers – and sales.
Leverage Amazon’s reputation
One of the hardest things about starting a new business is establishing a reputation for yourself. Without testimonials, it’s hard to get the products to speak for themselves. Amazon is a highly trusted global brand. You can tap into this reputation and reap the rewards for your own business.
Visibility for your brand and products
Amazon’s global reach can help you ramp up your brand identity. You can get millions of eyes on your products, without having to pour capital and resources into marketing strategies.
With Amazon, your business can grow without soaring infrastructure costs.
When you set up an Amazon business, you can benefit from Fulfilment By Amazon (FBA) too. That means Amazon picks, packs and ships your products directly from their warehouse. That saves you the hassle of shipping logistics and it also means you can offer Prime shipping to higher spenders.
The website is visited by millions of users each month from around the world, with a significant percentage of users residing in the UAE, thanks to the increased global preference for online shopping. You can also derive more credibility for your new brand by choosing Amazon as a platform to launch your e-commerce business. Amazon enjoys a great reputation and is trusted by millions of shoppers around the world as a safe and reliable shopping website.
Low investment costs
Amazon is the right choice for new sellers with a limited budget. Amazon listing fees are relatively low, and you don’t need to pay until you start selling.
Practical Shipping solutions
Amazon offers you several shipping and delivery options. You can store and ship your products yourself, store your products, and leave the shipping mission to Amazon, or entirely rely on Amazon to store, pack and deliver your products.
Multiple pay options
Payment options include credit cards, bank transfers, e-wallets, direct debit, and more. Plus, Amazon offers fraud protection.
Legal requirements for selling on Amazon UAE
To open an Amazon UAE seller account, you’ll need to ensure you’ve completed the required documents required by both Amazon and your free zone. These include:
- A business name
One of the first things you will need to do when opening an Amazon UAE account is to decide on a name. Remember that the UAE has strict company naming criteria, with restrictions on blasphemous, offensive and obscene language.
- Contact information
Amazon requires all sellers to provide their contact details, including their legal names. This won’t be made public, though your contact information will be used by customers and Amazon to reach you directly.
- An e-commerce license
To operate an e-commerce business in the UAE, you are required to obtain an e-commerce license.
- A valid visa
Foreigners living in the UAE need a valid visa to sell on Amazon.
- A corporate bank account
Amazon will use this bank account to send you the proceeds of your sales, usually every 14 days. Once you have a valid e-commerce license and visa, you can open a corporate bank account in the UAE.
- A billing address
Amazon requires a valid address as proof of identity. They will need to verify this to set up your account.
- A phone number
Amazon also requires a valid phone number as proof of identity. You can sign up for a phone contract once you have a national ID in the UAE.
- A national ID
You will need to provide legal proof of identity issued by your government.
Cost of an e-commerce license to sell on Amazon UAE
The cost of an e-commerce license to sell on Amazon UAE starts at AED 5,750. However, you’ll need to take into account a variety of different factors too, such as whether you’ll need office space, resident visas and other facility requirements. For a free and accurate quote tailored to your specific circumstances, reach out to our team at SPC Free Zone.
- How to open an Amazon UAE seller account
Once you’ve got your documents in order, setting up an Amazon UAE seller account is simple. We’ve broken the process down into five simple steps:
Step 1: Visit www.services.amazon.ae
Step 2: Sign up
Step 3: Enter your name, email and password, then submit
Step 4: Add your business information
Step 5: Upload the required documents for verification
Once you’ve submitted your application, you’ll need to wait for Amazon UAE to approve your account. This can take between 24 hours and several weeks. Once Amazon approves your account, you can start selling.
- Selling Costs
When selling on Amazon, there are a few types of selling fees you’ll have to pay that depends on the products sold and the fulfillment of the order. This includes referral fees, which are fees that sellers have to pay for each item sold. This amount varies depending on the category of the product and is deducted by Amazon.
- Seller Central access
Once all your documents have been registered, you will have full access to your Seller Central account. This account is your one-stop shop for everything related to your seller account, including making inventory updates, adding product information, managing payments, and so much more.
Steps to get an e-commerce license in the UAE
The steps to getting an e-commerce license in the UAE are relatively simple, providing you have the right documents in order. At SPC Free Zone, our business advisors can guide you through each of the steps below:
Step 1: Submit documents and wait for approval
Once approved, you’ll receive your e-commerce license in less than two hours
Step 2: Immigration card and e-channel application are issued
You’ll receive a temporary visa, which is usually valid for 60 days
Step 3: Entry permit and status change
Authorities will activate your status change once you’ve received your entry permit.
Leveraging Amazon Advertising for growing your business
In addition to being a platform for showcasing your products to the world, Amazon provides the tools to boost the visibility of your brand, to increase your sales while decreasing your costs.
One of the advertising solutions Amazon offers is sponsored ads that include:
- Sponsored Products: this type of sponsored ads is for individual product listing, and they appear on shopping results and product detail pages.
- Sponsored Brands: this type of sponsored ads features your brand logo, a custom headline, and a selection of your products, and they appear on shopping results pages.
- Sponsored Display: a self-service advertising solution to reach relevant audiences, with ads appearing on and off Amazon.
- Stores: custom multipage shopping destinations for individual brands that have a wide range of easy-to-create content templates and tiles to easily create professional-looking websites with no need for website design experience.
Frequently Asked Questions about selling on Amazon in the UAE
- Is it legal to sell on Amazon in the UAE?
Yes, in most cases it is legal to sell on Amazon in the UAE. However, in order to trade online in the region, you will need to obtain an e-commerce license. You can apply for both mainland and free zone e-commerce licenses, though free zone licenses are often better suited due to tax incentives and fewer currency restrictions.
- Can you sell on Amazon without a license?
No, you cannot sell on Amazon in the UAE without a valid e-commerce license. Failing to obtain one could result in administrative and financial penalties, as laid out in Article 335 of the Commercial Companies Law (CCL).
- How to list my products on Amazon?
To start selling on amazon you need to list your products, either in a previously existing listing or create a new one if you’re the first to sell a specific product.
In general, all products on Amazon need to have a Global Trade Item Number (GTIN) to be identified by Amazon. However, you only need to provide a product ID If you’re adding a product that’s new to Amazon with no existing listing to fall under, otherwise, you may need to purchase a UPC code or request an exemption.
Other information that goes into each product listing:
- Product name.
- Product description
- Product images.
- Stock Keeping Unit (SKU); an identification code used to track a product for inventory purposes.
- Search terms and relevant keywords.
- How to ship and deliver my products on Amazon?
As an Amazon seller, you can deliver your products to customers in three ways:
- Merchant-fulfilment: where you maintain your own inventory and pack and ship the products to the customers yourself.
- Amazon Fulfilment: where Amazon takes responsibility for packaging, labelling, and shipping products.
- Amazon-easy-ship: in this model, you store and pack your products while Amazon handles the delivery.
- How to measure your performance on Amazon
Registering on Amazon and creating your account is just the first step in your venture. monitoring your performance after you start to sell on the website is a key step in leading a successful e-commerce business.
To measure your performance, you need to keep things in mind:
- Performance metrics
As an Amazon seller, you need to watch out for the following metrics:
- Order defect rate (a measure of a seller’s customer service standards): < 1%
- Pre-fulfilment cancel rate (initiated by the seller before shipment): < 2.5%
- Late shipment rate (orders that ship after the expected date): < 4%
- Customer reviews: reviews are an indicator of the quality of your products and services.
Why choose SPC Free Zone?
Located in the heart of Sharjah with immigration services onsite, SPC Free Zone offers convenient, competitive and flexible business setup in the UAE. Choose from over 1,500 business activities and get your license issued in just 45 minutes. You’ll also benefit from a whole string of benefits, including up to 20 visas under one trade license, 100% foreign ownership with zero-paid up capital, and a dual license option that offers both mainland and free zone on the same license.
To expand your Amazon e-commerce business in the UAE, get in touch with our market-leading experts to learn more.
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